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Barrister
Barrister, Lawyer
Category: Real Estate Law
Satisfied Customers: 33730
Experience:  15 years real estate, Realtor. Landlord 26 years
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I'm in the state of Georgia. I received a prequalified letter

Customer Question

I'm in the state of Georgia. I received a prequalified letter from the lender. With that I put down $2000 for earnest money & $8000 for upgrades. I was advised to use the builders preferred lender in order to get $3000 toward closing costs. So I did. To make a long story short the loan officer has even gone as far as to send me a prequalified letter and to schedule me for closing twice. He also sent me a text message stating my loan has come back as cleared to close. Needless to say I never closed. Then now the underwriter brings up a nine year old issue where I cosigned for my dad on a house. That house was in foreclosure for a month and then he sold it. The house never went into full foreclosure. The biggest issue is the loan officer is telling the builder that some issues have come up on my credit so I don't qualify for a mortgage. He failed to tell the builder that the issue that came up on my credit was from 9 years ago. He is trying to say it's recent. In other words I recently sabotaged myself which is why I am not approved. I have also paid an alarm and music company to come out and install alarm and surround sound speakers(because the loan officer assured me I would be approved. What are my rights as far as suing?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Barrister replied 1 year ago.
Hello and welcome! My name is ***** ***** I will try my level best to help with your situation or get you to someone who can.
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Was there any "financing contingency" in the purchase contact that states you could get out of the contract if the loan didn't come through?
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Have you contracted another lender to see if you can get qualified for the purchase?
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thanks
Barrister
Customer: replied 1 year ago.
Not sure if that verbiage is in the contract. I did try another lender who said it wouldn't be impossible to get me approved after a discharged chapter 13 but it would be difficult. The loan officer knew about the bankruptcy before he prequalified me.
Customer: replied 1 year ago.
And as of this Thursday 7/30 we will be out of contract once it's not closed. On June 30th I have a text message from the loan officer that my loan has been approved. Then again on July 17th at 11am I was scheduled to close. I show up to closing. I get a text message from the loan officer "Do not show up to closing. Your loan is still not approved.
Customer: replied 1 year ago.
Hello
Expert:  Barrister replied 1 year ago.
Ok, then to be honest with you, this is going to boil down to whether there was a financing contingency clause in the contract that gives you the right to back out if you couldn't obtain financing. These are very common in most residential real estate contracts and I would be surprised if it wasn't in the contract if you were financing.
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As for the lender's assurances, unfortunately they are always conditioned on the underwriters approving the loan and they can withdraw any offer to make a loan at any time literally until the loan documents are signed. It isn't unusual for a loan to be approved or denied a couple days before or even the day of closing.
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I used to be a closing attorney for 4 different lenders and occasionally we would have to cancel a closing the day of because something showed up on a borrower's past history that they missed in a prior review.
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thanks
Barrister
Customer: replied 1 year ago.
But I didn't back out. The builders "preferred lender" prequalified me without looking at my credit. Then now he can't close the loan for issues that came up from 9 years ago. Contract is up this Thursday. The reason we aren't closing is because he couldn't close the mortgage. Do I have any rights at this point as far as being refunded all the money I put down?
Customer: replied 1 year ago.
I didn't back out. The loan officer was unable to close the loan.
Expert:  Barrister replied 1 year ago.
I understand that you didn't back out.. the financing contingency protects you in the event that you can't close due to the lender refusing to finance the loan. So that just gives you the right to back out and receive all your downpayment money back.
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So whether you can get your money back will depend on whether there is a financing contingency in the original contract.
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But if you can get the seller to agree to an extension so you can contact another lender to see if you can get financed through them, then you might be able to salvage the deal.
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thanks
Barrister
Customer: replied 1 year ago.
Thanks
Expert:  Barrister replied 1 year ago.
You are very welcome. Glad to help any time...
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Keeping my fingers crossed for you for the financing contingency clause...
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Barrister

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